Oil prices dropped Wednesday after the government said U.S. supplies grew more than expected last week.
Benchmark West Texas Intermediate crude fell $1.42 to $102.78 per barrel in New York, while Brent crude lost $1.88 to $116.90 per barrel in London.
The Energy Information Administration reported that U.S. crude oil supplies grew by 3.9 million barrels last week. Analysts expected an increase of 400,000 barrels. The government’s weekly report also said that U.S. oil demand dropped 2.7 percent, gasoline demand fell 2.8 percent, compared with a year ago.
The data suggest that motorists aren’t filling up as much ahead of the summer driving season.
“You continue to see some pretty anemic fuel demand levels” in the U.S., said Gene McGillian, a broker and oil analyst at Tradition Energy.
U.S. retail gasoline prices dipped slightly to a national average of $3.899 per gallon, according to AAA, Wright Express and Oil Price Information Service. The national average has declined by 2.6 cents this month, and it’s now it’s just barely under $3.90 for the first time since March.
Experts say that gasoline prices have leveled off this month, but they’re likely to rise to around $4 per gallon during the next few weeks as more refiners switch to producing summer blends of fuel..
In other energy trading, heating oil gave up 2 cents to $3.0970 per gallon and gasoline futures lost 7 cents to $3.1639 per gallon. Natural gas futures rose 3 cents to $1.980 per 1,000 cubic feet.